Obama Pledges More Fair Tax System

Presidential hopeful Sen. Barack Obama, D-Ill., shakes hands as he leaves a Town Hall event at Garfield High School in Los Angeles' Eastside Saturday, Oct. 20, 2007. Obama called for better education during a campaign stop at the East Los Angeles school immortalized in the 1988 movie "Stand and Deliver." (AP Photo/Reed Saxon)

Presidential hopeful Barack Obama on Monday acknowledged "the American dream is getting more expensive" and repeated his pledge to make the United States' tax system more fair.

"A generation ago, one salary could support a family. Now, it's two. And that's even becoming a stretch," Obama told eight guests at a private meeting in a Nashua restaurant.

Obama's plan would cancel out tax breaks from what he calls monied interests to provide $80 billion annually in relief for workers, seniors and homeowners. Obama, returning to an anti-Washington theme, said it's past time to return that money to the U.S. work force that fuels the economy.

"We've got a tax code that's making things worse. This isn't an accident. Special interests in Washington have carved out a trillion dollars worth of corporate tax loopholes at a time when income inequality is larger than any time since before the Great Depression," Obama said, before turning on President Bush and his tax policy. "George Bush's tax cuts, for example, went disproportionately to the top 1 percent of the population."

Obama's tax plan would give 150 million workers a $500 payroll tax credit, expand relief on mortgage interest, eliminate income taxes for seniors making less than $50,000 and simplify returns so millions can file in less than five minutes.

"What they're finding, I don't know if this will correspond with how you are doing, is that the American dream is getting more expensive. Costs are rising at the same that time wages and salaries have flat-lined. Jobs and pensions are less secure."

Obama also blamed a tax filing cumbersome system.

"It takes me two days to fill out these forms," voter Marion Noble told Obama.

The first-term senator said he understands. "I did my own taxes until about three years ago," he said.

Obama's solution, in part, would be to direct the IRS to send pre-filled tax forms to 40 million workers who take the standard deduction and have a bank account. They would simply have to sign and return it, which Obama estimates would save more than $2 billion in tax preparation fees and 200 million hours of work.

"There's no reason you should have to pay H&R Block to spend hours and hours. You should just get a form," Obama said. "It should take you about five minutes. That should save you a lot of time and aggravation."

Later Monday, Obama planned to file candidacy papers for the New Hampshire presidential primary.